This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Star Managers Miller, Nygren Stage Comeback

NEW YORK ( TheStreet) -- Since stocks hit bottom a year ago, the S&P 500 has soared 70% and many well-known mutual funds have recorded banner results.

Managers who have surpassed their benchmarks by wide margins include Bruce Berkowitz of the Fairholme Fund (FAIRX), Bill Miller of the Legg Mason Value Trust (LMVTX) and Bill Nygren of the Oakmark Select Fund (OAKLX ).

To be sure, not all the big names outdid the S&P 500. Will Danoff of the Fidelity Contrafund (FCNTX) and Ken Heebner of the CGM Focus Fund (CGMFX) are among the laggards. Should you sell those two losers? Hardly. Each climbed more than 40% for the year, and they remain near the top of their category for 10-year returns.

Much of the gap between winners and losers can be explained by stock-market conditions. When the rebound began, the shakiest small stocks led the way as investors took on more risk and worried less about bankruptcies. Blue chips trailed at a time when it seemed less important to stay with rock-solid investments. As a result, small-value funds ranked near the top, doubling their value for the year, while large-growth funds trailed with a return of 68%.

With investors embracing value stocks, the strongest performers included some diehard contrarians, such as the Legg Mason Value Trust, which has doubled during the past year. Manager Bill Miller looks for undervalued stocks with good growth prospects. His portfolio includes turnaround candidates as well as stocks that seem too cheap.

After topping the S&P 500 for 15 straight years, Legg Mason fell behind in 2006 and 2007. Performance suffered in 2008 when some of the fund's financial positions collapsed. But early in 2009, Miller decided the big banks had bottomed and he began loading up on stocks such as JPMorgan Chase (JPM) and Bank of America (BAC). Those soared as credit markets recovered. Miller also scored with unloved retailers, including Sears (SHLD) and J.C. Penney (JCP).

Another big winner was Oakmark Select, which returned 99% for the year. Manager Bill Nygren buys stocks that sell for two-thirds or less of their fair values. He only takes companies with strong cash flows and strong growth potential. The formula backfired in 2007, when some cheap financial stocks collapsed as the credit crisis unfolded.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
YHOO $27.05 -3.30%
AAPL $95.01 1.05%
FB $99.75 -4.15%
GOOG $683.10 -0.07%
TSLA $147.99 -8.99%


Chart of I:DJI
DOW 16,027.05 -177.92 -1.10%
S&P 500 1,853.44 -26.61 -1.42%
NASDAQ 4,283.7530 -79.3910 -1.82%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs